§ 14. Sir G. Nabarroasked the Chancellor of the Exchequer having regard to continuing inflation, what new steps he now proposes to restrain price rises.
§ Mr. BarberMy hon. Friend has always been a critic of purchase tax, and he will have noted that the reduction in the rates of purchase tax which I recently announced to the House has led to price cuts over a wide range of goods. In addition, I welcome the initiative of the C.B.I. and the response of the nationalised industries over price restraint.
§ Sir G. NabarroI warmly embrace my right hon. Friend as a front-runner in purchase tax matters and congratulate him on his important arrangements with the nationalised industries to confine their price advances to 5 per cent. in the coming 12 months. What steps is he taking on deficit financing by nationalised industry industries where, for example, on the railways in the commuter belt in the South-East——
§ Mr. SpeakerOrder. The other day the hon. Gentleman said to a Minister, "Hurry, hurry". I now say, "Hurry, hurry" to the hon. Gentleman.
§ Sir G. NabarroThough I do not wish to hurry my right hon. Friend unduly, may I ask him to say what he proposes to do about deficit financing, as, for example, with the railways in the South-East, which are advancing by only 5 per cent. as against the 30 per cent. asked for?
§ Mr. BarberIt is true that there will be additional demands on the National Loans Fund as a result of the policy I announced and to which the nationalised industries have agreed. My hon. Friend will bear in mind, however, that the nationalised industries will benefit from increased output and increased turnover as a result of the measures I announced and also from pay increases which will be at a lower rate than they otherwise would have been.
§ Mr. SheldonIs not the situation that the Government are now backing price moderation by nationalised industries, whereas their policy will have no control over private industry? Is this not only unfair but also unwise?
§ Mr. BarberWhatever the hon. Gentleman my think, the country at large welcomes the C.B.I.'s initiative and also the response of the nationalised industries.
§ Mr. Fletcher-CookeWill my right hon. Friend say whether the non-response of the American-dominated private sector in this country is due to fears of anti-trust action in America? If not, what is the reason for their very strange out-of-step behaviour?
§ Mr. BarberThere was a very misleading report in certain newspapers. I saw it in one newspaper on Saturday. It may be that my hon. and learned Friend has been misled. I have been informed that the Ford Company has announced that it intends to sign. I have also been informed that Chrysler and Vauxhall have not decided yet. I am told that the report which appeared in some newspapers on Saturday that Chrysler and Vauxhall had decided not to sign is quite untrue. Generally, the information coming to the C.B.I. is that the responses to its initiative so far are very favourable.
§ Mr. DalyellWill the right hon. Gentleman now answer the question put to him by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon)? Is not the purpose of these measures to take it out on the Government's own employees, for example, by giving senior scientists in five grades a zero pay award?
§ Mr. BarberNo, Sir. There is a system of pay research, and we have abided by it.
§ 17. Mr. Clinton Davisasked the Chancellor of the Exchequer if he will make a statement on the current position concerning the reduction of prices due to the cutting of the selective employment tax.
Mr. Maurice MacmillianA large number of price cuts have been made, and I am satisfied that the halving of S.E.T. has brought a real benefit to the consumer.
§ Mr. DavisIs the right hon. Gentleman aware that his gross complacency is not appreciated by housewives who have received no tangible benefit at all from these cuts? Would not it have been infinitely preferable if, the Government having decided to give away this money, they had decided not to impose their niggardly policies with regard to school meals and school milk?
§ Mr. MacmillanI must first correct the hon. Gentleman's impression about giving away this money. He means not taking it in tax from those who have earned it. That is not the same thing. I am satisfied that my right hon. Friend's recent measures will have and are having the effect intended. Prices are beginning to come down, including food prices.
§ Mr. Geoffrey FinsbergIs my right hon. Friend aware that a substantial number of retail shops—the Co-op, Tesco, Sainsbury and the like—have been cutting prices as a result of the halving of S.E.T.? Perhaps my right hon. Friend will arrange to supply extra spectacles to hon. Gentlemen opposite who do not want to see the facts.
§ Mr. MacmillanI am happy to have confirmation from my hon. Friend of some information that I obtained from Woman's Own London Extra that even beef prices have come down.
§ Mr. MarquandIs not the right hon. Gentleman aware that his right hon. Friend's recent measures are totally different in kind from the cut in S.E.T.? If the S.E.T. cut has had such a dramatic effect on prices, why did not the Chancellor of the Exchequer cut the second half this time instead of reducing purchase tax?
§ Mr. MacmillanI am aware that the S.E.T. cut was different in kind. It is the tax which to a great extent comes into food prices. On the whole, purchase tax does not. I am equally confident that, taken together, my right hon. Friend's measures will provide the answer that he seeks.